Qatar and Bahrain expect peace dividend following court ruling

Published March 19th, 2001 - 02:00 GMT

It appears to be a shining example of even-handed justice. Last week the International Court in Hague issued its verdict, awarding Bahrain with the largest of a string of disputed islands in the Persian Gulf, while giving Qatar smaller islands. Both sides described the decision a victory and declared Saturday a holiday to celebrate the end of a 60-year conflict that nearly led to war in 1986. 


In essence, the court recognized Bahrain’s sovereignty over the Hawar Islands and Qitat Jarada Island, while the energy-rich Zubara Strip, Fasht Dibel Rocks and Janan Island were accorded to Qatar. Announcing the verdict of the 17-judge panel, Presiding Judge Gilbert Guillaume explained that the court was upholding a 1939 ruling by Britain, which then, in its capacity as the colonial power in the region, had given Hawar to Bahrain.  


In its judgment, the court also delineated the maritime boundary between the two countries, in an area where oil and gas explorations are planned. The boundary split two low-tide elevations off the northwest coast of Qatar between the two countries. The court ruled that Qatari ships had rights to unlimited passage in Bahrain’s territorial waters separating the Hawar Islands from other Bahraini islands. 


Both sides had agreed to abide by the court’s decision, and with the court in the Hague being the highest judicial body of the United Nations, its ruling was final with no possibility for appeal.  


It was the first such case ever to have come from the Middle East before the International Court in Hague, and the way in which the judges had reached their decision will be carefully studied by a number of governments in other Gulf states. Qatar also has a territorial dispute with Saudi Arabia, and the United Arab Emirates is contesting Iran's possession of three tiny islands in the south of the Gulf. In the case of the latter, the UAE has not yet managed to persuade Iran to agree to an international arbitration 


The Hawar dispute had soured relations between the Qatar and Bahrain decades before they gained independence from Britain in 1971. As far back as the 19th century, Britain attempted to mediate an agreement that would preserve maritime peace and secure shipping lanes. The dispute reached its low point in 1986 when Qatari soldiers seized 29 workers sent by Bahrain to build a coast guard station on a contested strip of beach.  


Addressing the Qatari nation on television, the evening after the court’s decision was handed down, Qatar’s emir, Sheikh Hamad Bin Khalifa Al-Thani, described the verdict in a measured manner: “Although this award has many positive aspects that confirmed the rights of the State of Qatar to its territorial lands, its maritime zones, its continental shelf, and its exclusive economic zone... yet it has awarded Hawar islands to the State of Bahrain. These islands have a great standing in the hearts of our people, a standing that is deeply rooted in the history of this country. However, despite the pain we feel, we think that the court award has put an end to the dispute."  


Commentators expect that the court’s decision will reduce tension among the Arab states in the Gulf, increasing regional security efforts including the completion of a Gulf Cooperation Council (GCC) defense pact.  


The newfound tranquility should also enhance Qatar’s investment climate. Earlier this month, Standard & Poor’s raised the country’s long-term foreign currency rating to BBB-plus from BBB and improved its outlook from stable to positive. S&P was complimentary of the government’s fiscal position, which, albeit a result of high oil prices, saw a budget surplus equivalent to 12 percent of GDP in the last fiscal year. JP Morgan has hinted that, pending further progress on political reform, privatization and improved fiscal transparency, an upgrade to single-A status is possible in the medium term. 


For the first time since 1998—when the Qatar Telecom company (Q-Tel) was partially sold off—the privatization of Qatari state assets is expected to be moved onto the front burner. First up for sale may be the state-owned Qatar National Hotels Company (QNHC). Several other opportunities exist in the industrial sector, but there it is believed that the government will wait until 2002 before proceeding with the sale. 


Qatar’s reputation in the international business community as a source of major economic projects will be enhanced over the coming six months, with up to $3.5 billion worth of contract work set to be awarded. The RasGas expansion scheme, which could be worth up to two billion dollars, will be the main focus of attention. But there are numerous other public sector projects on the table, including expansion of Doha Airport, road and sewerage improvements and construction of $700 million worth of sports facilities and accommodations ahead of the 2006 Asian Games. 


Bahrain is also expecting an economic windfall from the decision by the court in the Hague. Several development projects for Hawar Island, which were held until the ruling was handed down, can now get the green light.  


Issa Sultan Al-Dhawadi, the chairman of Bahrain’s Southern Areas Development Company, said a multi-million dinar development project is to be undertaken on Hawar Island, a luxury marina complex, a new five star resort hotel, extensive leisure facilities and a resort village. Khadhem Rajab, Bahrain’s tourism affairs assistant undersecretary, stated that the verdict will pave the way for a progressive leap for the tourism industry 


The court decision is also expected to have internal political repercussions, especially in Qatar. Following Bahrain’s referendum, which set in motion a series of measures designed to transform the country into a constitutional monarchy, Qatar’s emir has just announced that his country would introduce an elected parliament within 18 months. The shockwaves of that development could well be felt in a number of other countries across the Gulf. — (Albawaba-MEBG)

© 2001 Mena Report (

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